Back to Back Order

Back to Back Order Process is a common scenario for Wholesale Distributors who use Sell-Source-Ship business model.

1. Customer places the order with you
2. You place the order with supplier 
3. Supplier ships the product to you
4. You ship the product to customer

For eg. You order a Shoe Rack from Flipkart and Flipkart orders the same to the supplier. Once the goods are received by Flipkart they pack and ship the goods to customer.

Drop Shipment

Drop Shipment Business Process

Receiving orders for items that you do not stock, and have a supplier provide the items directly to your customer is called Drop Shipment. The following diagram illustrates the drop shipment process.

Imagine a scenario where you order a Dell Laptop from Flipkart/Amazon(Order Processing Company). Flipkart doesn’t manufacture the Dell Laptop rather they create an order with DELL to ship the product to customer directly. DELL ships you the laptop and you pay Flipkart on successful delivery. Flipkart pays DELL after successful receipt by the customer on his behalf.